IRDA Makes 5-Year 3rd Party Insurance Mandatory for New 2-Wheelers

People buying bikes soon can expect a rise in the on-road prices. This is due to a decision by the Supreme Court of India, directing that the third party insurance cover for the two-wheelers should be for a period of five years. Keeping in direction with the decision, the Insurance Regulatory and Development Authority of India (IRDA) has issued a mandatory notice, changing the insurance cover from a period of one year to a period of five years. The notice will come in effect from September 1, 2018.

Bajaj Autos is urging their customers to avail the Hat-trick offer before August 31, 2018, in which they offer triple benefits, 1-year free insurance, 2-year free service, and 5-year warranty. Post the implementation of the 5-year period of third-party insurance, the prices would go up and the company will no longer provide the offer.

The offer is valid on the Platina, the Discover, the Pulsar NS160, the Pulsar 150, and the V-range of motorcycles. The customers who would buy the bikes post-September 1 will see an increase in the on-road price by almost INR 4,800 for the Platina and about INR 8,000 for the Pulsar NS 160, just in the charges for the insurance. To effectively provide their customers with the offer, Bajaj has assured that their dealerships will remain open till 11 PM on August 30 and August 31 to allow maximum customers to avail the offer.

The implementation of this notice will affect the bikes in the following way:

• Owners of two wheelers with up to 75cc engine will now pay a premium of INR 1,045 for the next five years, instead of INR 427 per year that they pay now.
• Owners of two wheelers with engine displacement between 75cc and 150cc will now pay a premium of INR 3,286 for the next five years, instead of INR 720 per year that they pay now.
• Owners of two wheelers with engine displacement between 150cc and 350cc will now pay a premium of INR 5,453 for the next five years, instead of INR 985 per year that they pay now.
• Owners of two wheelers with engine displacement larger than 350cc will now pay a premium of INR 13,304 for the next five years, instead of INR 2,323 per year that they pay now.

The implementation of the 5-year mandatory third-party insurance will take out the hassle of getting the insurance of the bike done every year. Sometimes, the date slips from the customer’s minds and they miss out on the due date, having to pay penalties or get challaned for the same. On the other end of the spectrum, the increase in prices for the bikes will create a problem for those people who want to ride the bike only for a short period of time.